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arbtrdr

arbtrdr
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  • Weekly Intelligence For MLP Investors [View article]
    wm/Mike - If you use Turbo Tax you simply enter the numbers from your K-1 in the interview. Same thing if you sell all of your units. The only complication is a sale of part of your units. Bottom line there do not do it.

    The IRS is not likely to ever have a tax question on a K-1. They have no more clue of the vague regualtions and arcane law than you do. I would suggest that about $75 per K-1 for some clerk to enter the data into a computer using a program almost exactly the same as Turbo Tax is a waste of lots of money.

    FWIW I have most of my assets in MLPs for over 20 byears now and own over 20. Is it worth the 4 hours it took me to enter the K-1 data to save $1450? Absolutely. Is having someone to sit with me during and audit worth the $1450? No, but if I was concerned TTax offers audit assistance guarantee for about $50. I also suggest that few accountants or even CPA have much of a clue on MLPs.
    Mar 16 11:42 AM | 6 Likes Like |Link to Comment
  • Weekly Intelligence For MLP Investors [View article]
    The section on mutual fund flows is excellent. Only suggestion is a short disclaimer that before investing in a MLP every investor should understand the tax consequences of MLPs. The primer at National Association of Puiblically Traded Partnership called MLPs 101 is excellent.

    Thanks again.
    Mar 15 04:05 PM | 4 Likes Like |Link to Comment
  • ModernGraham Quarterly Valuation Of Freeport-McMoRan [View article]
    Good analysis and comments. FCX and all the other metals producers had a disaster beyond their control in 2008 with the financial meltdown. Doesn't the Graham model provide for situations like what happened to miners in 2008?
    Mar 14 11:16 PM | 1 Like Like |Link to Comment
  • Enterprise Products Partners Is All Set To Grow [View article]
    Am very confused by your comment that EPD - "has a substantial acreage in the shale plays". You sort of make it sound like EPD is drilling wells, but intead is a gather and processor in those fields with production dedicated to EPD for defined terms.

    Also a bit strange to suggest it is going to grow in a signifant manner. Yes, $5B is huge but EPD has an enterprise value of approximately $80B. Thus $5B is only a 6% increase.

    The other comments about increasing export of propane, great long term financing and the insets on its assets are right on. More infrastucture is needed and 2014 will put in place more assets than in 2013 with even more projected for 2015. Opportunity abounds, but EPD continues to do it in a reasoned controlled manner.

    Last, potential investors need to remember there are significantly different tax ramifications when you own a MLP. Reading a bit on MLPs at the National Association of Publically Traded Partnerships and their MLP 101 primer should be required before investing as K-1s are not for everyone.
    Mar 13 05:36 PM | 5 Likes Like |Link to Comment
  • Magellan Midstream Partners: The Best MLP In America Is Trading At A Discount [View article]
    The fundamental calculations and assumptions need some significant work. There is also the simple fact that other higher yielding MLPs provide a floor based on the yield, while MMP would be negatively impacted by an increase in interest rates which would offer competition from alternative investments.

    Using your 11% threshhold as a place to invest would not RNO with its current 14.2% distribution and with the recent sale a situation on no long term debt be a good investment? 5 years at 14.2% equals a gain of 94% with a possibility/probability of the distribution increasing during that 5 years. Is this likely to be as good or better than MMP? My assumptions for RNO are for no increase in distribution or appreciation in unit price and the GP continuing status quo. Cash flow from the new operations and/or expansion into new ventures could provide a resumption of DCF/distribution growth in ther future. I also assue we are not going to stop using coal and the current low pricing will not get worse because smaller/more leveraged operators continue to go out of business.
    Mar 12 05:39 PM | 1 Like Like |Link to Comment
  • Boardwalk Pipeline Partners: Is There Anything To Be Salvaged From This Fiasco? [View article]
    Von - Suggesting looking at Kinder as a model either in the past or future is not really a good idea. KM has significant issues with only about a 1.5-1.9% increase from its existing asset base and greatly slowing CAGR. They have absolutely no reserve margin with $22M out of Billions for retianed cash. Richard is also the one that took out the public when he took KMI private, made huge $$ and then sold it back.

    I agree BWP is dead money for several years and not a buyout possibilty as L owns most of BWP.
    Mar 12 12:08 PM | 1 Like Like |Link to Comment
  • U.S. Natural Gas Stores Are Dangerously Low, That's Good For Pipeline And Storage Companies [View article]
    David - The global warming issue is one I do not care to tackle. Good analysis but a couple of problems in your basic thesis.

    NG prices are lower in the future than today. This has made NG storage lower and not profitable for the last six to 9 months - NOT more profitable. No company is going to pay to store gas that is likely to be worth less in the future.

    Your comments on infrastucture are correct. Billions is being spent on everything from gathering to processing to transportation by companies including the KM family and EPD. It is a bit of a stretch to call EPD a pipeline company as it gets most of its $$ from processing, storage and now a growing exporting of propane. That said, much of the problem with spot prices of NG have been created by the stupid regulators and people who forced the closure of coal generating plants without having an alternative in place. Great to shut down an older coal plant for NH, but unless your new NG peaker has a pipeline and guaranteed supply of NG you are likely to be a bit cold and dark!
    Mar 10 10:36 AM | 6 Likes Like |Link to Comment
  • Why Not Purchase This 7.5% Yield MLP For The Long Term? [View article]
    APL has had an increase in price of almost zero in the last 4 years. Looking at APL when it was near BK in 2008/9 after having decreased in price from about $60 to under $5 is really misleading top suggest it has outpreformed in the last 5 years. Take a look at some of the best MLPs including EPD, KMP, PAA, MMP and others and in relation to these APL has not done well. After cutting their distribution in a near BK they are now up to about 65% of where they were 6 years ago!

    Is APL one of the weaker MLPs - yes. Is it worth holding at the current approximately $30 unit price - yes. But the reason for its large yield is that is has continually given guidance in the last couple years and fallen short. 3 months ago they agreed to have thier GP waive IDRs from the .65 to .70 per quarter payout and APL suggested they would increase in the next quarter to the .65 threshold after they missed for Q3 of 2013. For last quarter another miss and guidance now pushed out till 2014YE.

    APL sadly has lots of KW abnd POP contracts and issues with gas volumes. They are worth buying at this level for those that are VERY VERY patient, but APL has a long history of being mismanaged.

    Suggesting the 8% yield is a reason to invest before APL finds a new bottom is really bad advice. Investors instead should ask why APL is not increasing its distribution and the others are. Investors should ask why APL is yielding that amount if it is such a great company.

    FWIW - I first bought APL in 2000 at about $20. It is in the bottom 1/3 for $$ amount of my MLP holdings.
    Feb 19 02:06 PM | 9 Likes Like |Link to Comment
  • Seadrill's Path To Problems [View article]
    Lots of people do not understand MLPs including M* and Zacks. And oh yes, forgot to include our author.
    Feb 19 11:43 AM | 2 Likes Like |Link to Comment
  • Seadrill's Path To Problems [View article]
    Too many mistakes and the author misses the point when comparing SDRL to others the new rigs with SDRL vs an almost 20 year old situation with RIG!

    If SDRL has a problem why and how were they able to get a long term 5 rig deal with Pemex for top dollar?

    Your crystal ball seems to be a bit cracked.
    Feb 19 09:19 AM | 4 Likes Like |Link to Comment
  • How Much Dividend Income Growth Do You Need? [View article]
    First and foremost is that I live on SS and my pension and thus while income is good (dividend paying stocks tend to have higher growth over time) in my case it is not required.

    Where it seems we diverge is I keep a small 2-3% portion of my investment in somewhat to very speculative plays. Pharma startups or oil in a new thing called shale were some of the places I put money in the past. No income here, but if you hit a double and a home run out of every four tries you ultimately provide lots of income over time. And I do get it that you use BDCs, albiet the more conservative of this group, for a bit riskeir plays and higher yield. I have always valued your expertise in this area

    Last, bank preferreds are a vert interesting investment area. Some are counted as paying interest or non-qualified dividends like a REIT and others qualified. Some are likely to go on virtually forever and others like RBS issues likely to be called relatively soon at par because the bank can no longer count them as tier 1 capital. Thus there are preferred that are really sort of value plays and others purely income. This is an area where considerable research is needed to avoid pitfalls and Quantum Online provides great information on the terms of virtually all preferred issues.
    Feb 16 10:19 AM | 10 Likes Like |Link to Comment
  • Weekly Intelligence For Master Limited Partnership Investors [View article]
    Great summary. I would try to add is ther contact phone numbers and times for the conference calls. Morgan Stanley has this on thier MLP summary reports and it makes getting to a conference call much easier.

    My only comment would be that BWP actually has good assets. What they lacked was the ability to figure out how to manage them when the market for moving NG changed abut 3 years ago. BWP made a choice not to renew contracts at a lower rate and instead sell space in the spot market until demand and rates improve. This caused about 1/3 of their problem as lower renewal rates would pay them more than the $$ today, but cap upside in the future. Hard to fault BWP on buying Petal from EPD. It is a world class facility, but nobody is going to store gas today with rates lower in the future. This is also going to hurt the other MLPs that have NG storage like Niska, BPL, and PAA in varying degrees. But again, this market will come back.
    Feb 16 08:49 AM | 3 Likes Like |Link to Comment
  • El Paso Could Be The Next Problematic MLP [View article]
    A couple of comments -

    You state, "but EPB is not expecting to increase its quarterly distribution over the past three years". This obviously makes no sense. EPB said they would not increase in either 2014 or 2015. Also the Ruby drop down was already planned long ago.

    As to BWP, BWP is providing about $1.60 in DCF, but management (rightfully so IMO) decided to bite the bullet and get their balance sheet back in order. TRhey were not forced to cut the payout to .10 and probably today wish they had made it the .40 they will earn.

    The situation of pipelines is one of change. Pipelines that were taken out of service are being repurposed. NS changing an unused one to take NGLs to Corpus and MMP with one between El Paso and houston are two examples. The problem with pipes is you cannot move them. a great quote from the BWP people. But we need to remember things change - anyone else remember NBP (now OKS) declaring no distribution increases for over 3 years in 2002 when they had contract failures. Today that pipe is both expanded and running at the full allowed tariff.

    Same thing with storage. Today it is worth nothing - absolutely ZERO. BPL, BWP and others are writing down assets and giving estimates of little or no income. Obviously people will not pay to store gas worth $4+ today to take it out and probably sell for less later. But again will we return to a more normal risk based pricing curve where future commodity prices are higher? Definately likely. In this case storage will return to be a profitable business. The midstream business is always in a ste of flux as prodcution moves from place to place and demand as well.
    Feb 13 11:27 AM | 8 Likes Like |Link to Comment
  • Preliminary Review Of Buckeye Pipeline Partners' Q4 2013 Results [View article]
    The problems with BWP was company specific and coming for a long time. They stated it well in that they simply have pipes in the wrong place and the storage business has vashished with future prices being lower for NG. Hard to imagine anyone paying to store gas that will be worth less in 6 months. BWP called for no revenue from storage.

    BPL is not in the same business as BWP. EPB is more similar and certainly has issues like BWP. What people are missing about BWP is that they have about $1.60 in DCF and could have cut to say .40 per quarter. They made the decision to get all the bad news out there and probably never thought the market would react as it did.

    The market reaction to BWP - specific to those MLPs with long haul pipes that are potentially underutilized. The same thing happened to OKS in 2002 when NBP had issues with contracting. They did not cover their distribution and it stayed flat for some 4 years. Now that line is expanded and full. 10 years makes for lots of changes.
    Feb 13 09:03 AM | 1 Like Like |Link to Comment
  • Baytex Bids To Buy Out Aurora Oil: Investment Implications [View article]
    The great thing about the Aurora land is it is proved, all the infrastucture is already there, Marathon is a World class operator and last it is absolyutely the best land in the best play in the World. With Austin Chalk and othr layers a possible plus why would BTE not be happy with buying a 6X EBITDA. Little downside on this one.
    Feb 11 03:19 PM | 1 Like Like |Link to Comment
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